Abstract Background Secreted frizzled related proteins (SFRPs) are multifunctional modulators of Wnt and BMP (Bone Morphogenetic Protein) signalling necessary for the development of most organs and the homeostasis of different adult tissues. SFRPs fold in two independent domains: the cysteine rich domain (SfrpCRD) related to the extracellular portion of Frizzled (Fz, Wnt receptors) and the Netrin module (SfrpNTR) defined by homologies with molecules such as Netrin-1, inhibitors of metalloproteinases and complement proteins. Due to its structural relationship with Fz, it is believed that SfrpCRD interferes with Wnt signalling by binding and sequestering the ligand. In contrast, the functional relevance of the SfrpNTR has been barely addressed. Results Here, we combine biochemical studies, mutational analysis and functional assays in cell culture and medaka-fish embryos to show that the Sfrp1NTR mimics the function of the entire molecule, binds to Wnt8 and antagonizes Wnt canonical signalling. This activity requires intact tertiary structure and is shared by the distantly related Netrin-1NTR. In contrast, the Sfrp1CRD cannot mirror the function of the entire molecule in vivo but interacts with Fz receptors and antagonizes Wnt8-mediated β-catenin transcriptional activity. Conclusion On the basis of these results, we propose that SFRP modulation of Wnt signalling may involve multiple and differential interactions among Wnt, Fz and SFRPs.